CUNA: Congress should retain and reaffirm CU tax status

CUNA urged Congress to retain and reaffirm the credit union tax status, and outlined the importance of not-for-profit financial cooperatives in a letter sent to the Senate Finance Committee Monday. The letter was sent in response to a committee request for comments and proposals as it continues its work on tax reform.

“The importance of having not-for-profit credit unions as vibrant and viable alternatives in the financial services marketplace is as significant today as it has ever been. Credit unions provide accessible and affordable basic financial services to people of all means and encourage the equitable distribution of capital across all individuals, families, communities and small businesses,” wrote CUNA President/CEO Jim Nussle. “Credit unions infuse financial market competition with multiple and differentiated competitive business models. They help keep financial services accessible – and affordable – for all consumers, whether they are members of a credit union or not.”

The tax treatment for credit unions continues to serve the purpose for which it was conveyed;

The tax status represents good public policy, because it causes the creation of substantial benefits to the public, far in excess of its cost; and,

Taxing credit unions would represent a tax increase on 110 million Americans—taxpayers who paid a total of $1.2 trillion in taxes in 2014—and would likely lead to the elimination of many, if not most, credit unions.

The Senate Finance Committee will conduct a hearing Tuesday, starting at 9 a.m. (ET) on tax reform prospects and challenges. It will be streamed live on the committee’s website

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